AGREEMENT FOR DEED-IN-LIEU-OF-FORECLOSURE
Parties: Angeles Income Properties, Ltd. V. ("Borrower"); and Angeles Mortgage
Investment Trust, a California business trust ("Lender")
Property: Property in Cuyahoga County, Ohio. The property is legally described
in Schedule 1 attached hereto.
Date: July 28, 1998
R E C I T A L S
A. Borrower is the owner of fee simple title to the Property. Lender
is the owner and holder of the loan documents (the "Loan Documents") described
in Schedule 2 attached hereto.
B. The Loan Documents secure outstanding principal indebtedness and
accrued interest (the "Indebtedness") in excess of Two Million Dollars
($2,000,000.00). The maturity date of such Indebtedness is March 1, 1995 (the
"Maturity Date"). Borrower has failed to pay the Indebtedness by the Maturity
Date, and has proposed to Lender that the parties resolve Borrower's default by
providing for the transfer and conveyance of the Property to Lender in exchange
for Lender's agreements and consideration that are hereinafter provided in order
to avoid time-consuming and expensive litigation.
C. The Property presently is the subject of a foreclosure action
styled Angeles Mortgage Investment Trust v. Angeles Income Properties Ltd., V,
et al., No. 309759, pending in the Court of Common Pleas of Cuyahoga County,
Ohio (the "Action"), in which Lender has sought to foreclose the Mortgage.
Final judgment has been entered in the Action, in the form of that certain
Magistrate's Decision, filed as of December 31, 1997 and adopted by the Court as
of March 25, 1998 (the "Magistrate's Decision").
D. As determined in the Magistrate's Decision, the amount owed by
Borrower as of May 7, 1997 on the debt secured by the Mortgage is $2,000,000
plus interest. As of July 1, 1998, the amount owed with interest is
$1,252,671.71.
E. Upon the terms and conditions set forth below, Borrower has
agreed to convey the Property to Lender and to release Lender from any and all
rights and claims arising out if the Loan Documents, and the Lender, upon the
occurrence of the conveyance, has agreed to release and forgive the Indebtedness
of the Borrower as more fully hereinafter provided.
F. Lender, in its sole discretion, may elect to assign some or all
of its rights under this Agreement and/or direct that conveyance of the Property
be made to a purchaser designated by Lender.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
provisions and covenants made herein, and the receipt of other good and valuable
consideration, the receipt and sufficiency whereof are hereby acknowledged,
Borrower and Lender hereby agree that:
AGREEMENTS
1. Consideration. The consideration for the conveyance of the
Property to Lender by Borrower shall be the Credit. It is the intention of the
parties hereto that the delivery of the Deed (as defined below) and the Credit
shall constitute a final and complete settlement of all obligations between them
arising from, related to or connected with the Indebtedness.
2. Conveyance. The Property shall be conveyed by Borrower to
Lender, or at Lender's option, to Lender's designee, in lieu of Lender
foreclosing upon the Loan Documents by a good and sufficient limited warranty
deed ("Deed") warranting the Property to be free and clear of liens and
encumbrances by, from, through, or under the Borrower except matters of record,
including without limitation, (a) liens and encumbrances of record, (b) zoning
ordinances, (c) easements and rights of way of record, (d) conditions,
limitations, and restrictions of record, and (e) the Mortgage.
3. Title Exceptions. Borrower and Lender have been furnished with a
copy of Final Judicial Report (5327 Northfield Road, Bedford Heights, Ohio)
filed in Case No. 309759 in the Court of Common Please, Cuyahoga County, Ohio,
Angeles Mortgage Investment Trust, Plaintiff v. Angeles Income Properties, Ltd.
V, et al., Defendants, showing that in addition to the Loan Documents, the
Property is subject to (a) a lien for taxes and assessments for the first half
of 1998, which are not yet due and payable, (b) a mortgage to Canada Life
Assurance Company, in the principal sum of Two Million Eight Hundred Thousand
Dollars ($2,800,000), (c) a lease by and between Angeles Income Properties Ltd.
V dba Southgate Village Apts., Lessor, and Xxxxx Laundry Service - Cleveland,
Inc., Lessee, dated February 6, 1996, filed for record July 2, 1996 and recorded
in Volume 96-06335, Page 45 of Cuyahoga County Records, and (d) the Mortgage.
4. Representations and Warranties. Lender represents and warrants
that it has the power and authority to perform this Agreement, and that the
officer signing this Agreement on its behalf, is duly authorized.
5. Escrow. As promptly as possible, an in any event, on or before
July , 1998, Lender shall deposit in escrow with the Squire, Xxxxxxx & Xxxxxxx
L.L.P. (a) the Signed Note described in Schedule 2 hereof and (b) the side
letter reflecting the Credit (the "Letter Agreement"). As promptly as possible,
and in any event, on or before July , 1998, Borrower shall deposit in escrow
with Squire, Xxxxxxx & Xxxxxxx L.L.P., the Deed and the Letter Agreement. As
promptly after the foregoing items are deposited in escrow as is possible, and
in any event within three (3) business days after such items are deposited,
Squire, Xxxxxxx & Xxxxxxx L.L.P. Shall consummate the transaction provided for
herein by (a) filing the Deed for record and (b) delivering the Letter Agreement
and the Signed Note to the Borrower. Upon filing the Deed for record, Lender
shall take possession of the property and all records, reports, documents and
instruments relating to the Property.
6. Casualty and Condemnation. (a) In the case of damage or
destruction to the property before the Deed is filed for record, Borrower shall
promptly give Lender written notice of the damage or destruction, together with
such reasonable details of which Borrower may have knowledge, including, without
limitation, an estimate of the reasonable and necessary cost of restoration of
the Property as nearly as practicable to its condition immediately before that
damage or destruction. After Borrower's notice is given, Lender may at its
option terminate this Agreement without further obligation under this Agreement,
or if Lender shall elect not to terminate this Agreement, the parties to this
Agreement shall close the transaction as contemplated in accordance with the
terms of this Agreement and Borrower shall assign to Lender or Lender's designee
all insurance proceeds, including rental loss insurance proceeds, if any, for
the period from and after the Deed is filed until the Property is fully
restored, for such damage or destruction.
(b) If before the Deed is filed, written notice shall be
received by Borrower of any action, suit, or proceeding to condemn or take all
or any part of the Property under the powers of eminent domain, Lender shall
have the right to terminate its obligations under this Agreement by notice in
writing to Borrower given before the Deed is filed. If the Lender shall elect
not to terminate its obligations under this Agreement, Lender shall receive an
absolute assignment on the date the Deed is filed of the entire proceeds of or
right to the condemnation award. Borrower shall convey the Property less that
part so taken or subject to the condemnation proceeding, as the case may be.
7. Prorations. Taxes and assessments tenant rents and utility
costs, shall not be prorated. Upon conveyance, the operating account for the
Property, including all tenant rents, deposits and cash, shall be transferred
from Borrower and Insignia Property Residential Group, as property manager for
the Property, to Lender.
8. Expenses. Lender or Lender's designee shall pay the cost of
filing the Deed for record and the title examination charges and related costs
of obtaining the Final Judicial Report.
9. Dismissal of Action. Upon execution of this Agreement and
receipt by Squire, Xxxxxxx & Xxxxxxx L.L.P. in escrow of the Deed and Letter
Agreement, Lender shall file a Motion to Dismiss with regard to the Action in
the form attached hereto as Exhibit A.
10. Broker. Borrower represents that the Property is not listed
for sale with a real estate broker or agent, and Borrower and Lender agree that
upon the filing of the Deed for record, no commission or other payment shall be
due or payable to any entity or person.
11. Failure of Title. If for any reason whatsoever, the status
of the title changes between the date hereof and the date of closing, then at
the option of Lender, this Agreement shall terminate, and Borrower and Lender
shall be released of all liabilities and obligations hereunder; provided,
however, that (a) the Lender may waive any title exception or defect which is
not among Title Exceptions, and (b) Borrower shall have thirty (30) days after
the change of status of title in which to cure the same unless the change is
acceptable to Lender.
12. Restoration of Rights and Remedies. If for any reason
whatsoever this Agreement shall terminate and not be consummated in accordance
with its terms and conditions, the Lender shall be fully restored to all rights
and remedies which it has at law or in equity or pursuant to the terms of the
Loan Documents and Borrower shall not be entitled to, and shall not raise the
existence or termination of this Agreement as a defense to any action which
Lender may institute against Borrower pursuant to the Loan Documents.
13. Notices. All notices, demands and requests given or
required or desired to be given hereunder shall be in writing and shall be
delivered in person or by overnight express delivery or by United States
certified mail, return receipt requested, postage prepaid, as follows:
To Borrower: Angeles Income Properties, Ltd. V
c/o Insignia Properties Trust
One Insignia Financial Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
To Lender Angeles Mortgage Investment Trust
000 X. Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx
with a copy to: Squire, Xxxxxxx & Xxxxxxx
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall, for all purposes, be deemed an original. All
of such counterparts, taken together, shall constitute one and the same
agreement.
15. No Merger. It is the express intention of the Borrower and
the Lender that the mortgage estate created by the Mortgage and fee ownership
are not intended to merge as a result of the conveyances contemplated hereby,
but shall remain separate.
16. Entire Agreement. This Agreement, the Deed, the Release and
any other instrument delivered hereunder, constitutes the entire agreement of
the parties hereto as to the subject matter hereof, and there are no agreements,
representations, warranties or promises as to the subject matter hereof which
are not set forth herein.
17. Successors and Assigns. This Agreement shall be binding on
and inure to the benefit of Borrower and Lender, their respective successors,
assigns, grantees, and legal representatives.
Borrower and Lender have executed this Agreement by and through
their respective duly authorized officers and partners as of the date set forth
above.
ANGELES INCOME PROPERTIES, LTD. V
a California limited partnership
By: Angeles Realty Corporation
a California Corporation
Its General Partner
By: /s/ Xxxxxx X. Xxxx, Xx.
Xxxxxx X. Xxxx, Xx.
Its Vice President
ANGELES MORTGAGE INVESTMENT TRUST
a California business trust
By: /s/ Xxxx Xxxxxxxxxx
Xxxx Xxxxxxxxxx
Its Vice President
